McKinsey & Company Engagement Manager Interview Questions and Answers

Round: Case Study Interview
Experience: The first thing I did was to clarify the expectations of the client and any associated constraints. Priyanka clarified that we need to focus on EBIT and ROI improvement. The current EBIT and ROI were negative and our goal was to take them to 25% and 30-35% respectively. There were no financial constraints for the particular case. Structure: ROI = After Tax EBIT / Invested Capital Invested Capital = Working Capital + Net Investments I clarified that I would be looking to increase EBIT by increasing revenues or reducing costs or both. Then I would look at decreasing Invested Capital through analyzing components like Receivables, Cash, Inventory, Payables, Fixed Investments and Depreciation. She agreed and asked me to start by picking up one of the drivers. I picked revenues because there were considerable improvements required in both EBIT and ROI and cost cutting might not suffice. She nodded and we proceeded. I listed the various revenue drivers in a hospital: Diagnosis, OPD and Procedures (she helped me a bit here with correct terminology). After some discussion it was clear that the revenues from procedures, which was a major contributor to hospital’s income, were declining. The price of procedures had been constant so it was an issue with the number of procedures. Also, the other hospitals had lower prices for the same services hospital seemed to be charging a premium for their services and I had to find out why. I elaborated the various factors that would drive premium such as patient care, diagnosis authenticity, convenience and future tests required. She asked be to elaborate patient care. I listed 5 factors: doctors & nursing staff, length and time, accommodation, flexibility of meeting close ones, and miscellaneous things such as food etc. I also prioritized these putting doctors and nurses on the top. It was here that she revealed that some key doctors had left an year back and the hospital’s premium was to be attributed to the presence of these doctors when they were in service, This nailed down the key reason of decline of procedural revenues. Next, she asked me to look at reducing costs. I elaborated the entire value chain of the hospital: 1. Supply Side consisting of utilities, drugs and equipments 2. Operations consisting of procedures, labor and R&D. 3. Marketing and promotions After a brief discussion on the factors driving supply side costs, I identified that the procurement of drugs can be optimized through consolidating purchase. On the operations side, we figured out the wage structure was pretty much fixed and I detailed out a few recommendations here to improve labor efficiency. One was to use a performance based incentive structure with the use of balance scorecards and leading indicators to assess performance. She was quite happy on hearing this as this was part of the recommendations they had given to the client. The case ended here.
Tips: My advice to you would be that whenever in doubt about a new business, ask rather than guessing and spending time that could be utilized in more fruitful discussions.

Round: Case Study Interview
Experience: I tried to scope the problem down but Rajiv wanted me to structure my thoughts first and come up with an approach on a broader level. I came up with the following structure Structure: 1. Strategic Goals: a. Short term: Solve some existing problems and build a talent pool b. Long term: Impact on society and economy 2. Organizational: a. Supply of Labor Pool b. Attracting and sustaining employees i. Salary and Incentives j. Personal Development through trainings k. Challenging assignments l. Exit Options c. Execution to meet the expectations of the 4 stakeholders: District collectors, Pan-IIT, Government and Employees i. Management j. Teachers / Training k. Program Structure: Curriculum, Length, intensityl. HR m. Administration 3. Financial: Source of Finances, debt and equity distribution. Rajiv was fairly satisfied with the comprehensive structure and after a brief discussion, clarified that the focus of the present case was to just think about the building blocks of the organization. Since I had listed down quite a few things, he just wanted me to have a discussion on the various aspects of the problem and we chatted for 15 minutes on what should be the issues in each of the elements of the Organizational part and recommendations to tackle them. Detailing out an exhaustive structure and explaining my approach in detail gave the confidence to the interviewer. After that I just had to engage him in discussion on various aspects till he decided to close the case.
Tips: Try to scope down an open ended problem such as this. If interviewer wants to explicitly look at your broad level thinking, such as in my case, it is important to take your time and come up with as exhaustive a structure as possible.

Round: Case Study Interview
Experience: Since the problem given to me was very open ended, I started asking a lot of questions on the objective of the client and any constraints we need to consider in our analysis. Adheet revealed the following information: The suburb is still under development and there is no infrastructure as of now. The client is actually a large hospital chain in the country and is not looking for immediate profits but eventually within 3-4 years. Financial constraints not an issue. Hospital again! But the good part was that I had got some confidence on the business after having interviewed with Priyanka earlier.
Structure: a. NPV > 0 b. Determine cash flows: Revenues, Costs, Working Capital and Capital Expenditure c. Determine appropriate discount rate for cash flows: an appropriate way would be to use industry comparables of similar hospitals. He agreed and asked me to discuss the revenue aspect. I laid down the following approach: 1. Identify customer disease patterns and demographics. 2. Pick up the attractive opportunities that could ensure long term sustainability. Identify the customer segments to target. 3. Check if the opportunity aligns with business vision and company’s capabilities. 4. Determine the appropriate price for these services based on consumer willingness to pay To simplify things he gave me an additional data point here. The real estate developer of the area had predicted the following growth of population in that area: 100,000 in 3 years 500,000 by 6 years 1 million by 10 years. He then asked me to determine the healthcare requirements of these potential customers. I listed down 3 factors here: Socio Economic Status, Age and Idiosyncratic factors such as family history. He was impressed and asked me how I could determine the Socio Economic Status. I gave a lot of options here but he kept pushing that we had no access to any formal databases and some proxy was needed. After a bit of thinking I told him that the kind of apartments being bought by the families could proxy for their socio-eco status. This was what he was looking for and immediately gave me the following information. Super luxury flat (1 crores): 10% of families, luxury (50 lacs): 40%, 1 bedroom apartment (20 lacs): 50%. I asked about the average number of people per household and he gave me the numbers of 5, 4 and 3 respectively. I told him that even the relatively poorest of families were actually quite well to do as they could afford a 20 lacs flat. He agreed and asked me what kind of service on a broad level would suit our target customer segment. I told that 2 kinds of services should suffice here: Deluxe and Regular. Deluxe would include some premium procedures that could be utilized by either of the segments. Regular Procedures would be more day to day services provided to a wide spectrum of the population. He mentioned that regular procedures would need a breakeven volume to turn profitable and asked me to develop a timeline for introduction of the two kinds of services. Based on the population immigration information he had provided me earlier, I recommended that the client should start with deluxe services when the customer base would be small and eventually move to other regular services and customer base grows big enough to achieve breakeven. He asked me if there were any risks involved here and I mentioned that competitive threat could always be a concern here. I recommended that such a threat could be conquered to an extent by making appropriate arrangements for customers to receive these services at a nearby hospital of the same chain. He liked the idea since the hospital could bear initial losses. We had some more discussion on other issues of such as real estate, supplier contracts, equipments etc. before he closed the case. And as always, he discussed about movie making experience and also my work at Microsoft.
Tips: Be careful when the interviewer is giving a lot of numbers. He might be looking to test your quantitative abilities. Clarify upfront if in doubt.

Round: Case Study Interview
Experience: I started by laying down my hypotheses on why a 5th terminal should be built:
1. Reduce congestion on existing terminals by increasing capacity
2. Facilitate Growth of air traffic and passenger traffic
3. Achieve optimization between traffic on runways and terminals He wanted me to test the first hypothesis. I confirmed whether airport capacity can be defined in terms of passenger flow rate. He agreed but wanted me to look at another measure of capacity which is the air traffic flow rate. In simple terms, this was the maximum number of airplanes that can land or take off from the airport in a day.
I asked for specific information and got the following data:
1. Air traffic operates for 17 hours in a day.
2. Each terminal has 50 gates I said to figure out whether there is any real capacity increase we need to find out whether New Capacity = MIN{ Total number of airplanes determined by total gates, Total number of airplanes that can use the runway in a day} > Current Capacity He asked me to make the required assumptions and proceed. I made 2 specific assumptions:
1. Both runways are identical and capable of serving same traffic.
2. All airplanes on an average take the same amount of time while standing on gates and similarly while using the runway (take off or landing)
He then gave me the following data: A plane takes 90 sec on average on the runway while landing or takeoff. This meant that the runways can support a total of 17 * 2 * 3600 / 90 = 1360 planes per day. Next, he told me that every gate can support 5 planes on an average. This meant that with 5 terminals a total of 5*50*5 = 1250 planes can be held on the gates. This gives the new capacity = Min{1250,1360} = 1250 an additional capacity of 250 planes. So one part of the hypothesis was verified that there would be additional capacity added by building 5th terminal. Now we had to establish whether it would reduce congestion. We started discussing the various sub hypotheses that would need to be true for this to happen. Things such as feasibility of movement of passengers and staff from one terminal to another, movement of infrastructure(shops etc) to the new terminal and so on. We chatted for almost 10 minutes on this and he asked me to synthesize the case. The hypothesis had been proven right.
Tips: Practice hypothesis driven case solving as well in case you come across such an interviewer.

Round: Case Study Interview
Experience: I clarified what all businesses the client was running, the relative share of revenues in each and the competitive landscape in each. Then I laid down my approach:
1. Identify the attractive businesses for the future. This can be done using a 2X2 matrix of competition vs. growth opportunity.
2. Choose the ones that are feasible to focus on in the next 5 years based on company’s capabilities.
3. Chart out an execution strategy for these businesses accounting for challenges and the effect on bottom line.
4. Consider divesting the unattractive businesses considering the risk of impact on the existing ones since there is lot of interdependency in the web space. He was satisfied with the overall structure and drew out a chart with lots of customer and growth data on the existing businesses. It’s difficult for me to explain our discussion over here because first, the chart was fairly comprehensive and second, he asked me to hand over to him everything I had written while solving the case. On a broad level, we discussed the attractive business opportunities and what challenges we would have to consider. He asked me to give 10 specific challenges in one particular business and it was here that my Web 2.0 course learning and software experience helped me.
Tips: Push yourself when the interviewer says..”What else...” - this is an indication that the interviewer wants to check how creative you can get with your thought process.

Skills: Ability To Cope Up With Stress, Case Solving Ability, Case Analysis
College Name: Indian School Of Business (ISB)

Round: Case Study Interview
Experience: We started the interview with a 3-4 minute chat about how painful it can be in the morning to travel and start working right away (He had just arrived).

He then quizzed me about leadership instances at work and in academic career; then I took him into what he believed leadership was. We had a long chat about why leadership was important in consulting. We also spoke about how I was to translate a very explicit form of leadership displayed at work (I was leading operations in a factory) to an implicit environment (like consulting). We talked about what leadership skills are transferable and ones which are not.

The case was about a global heavy vehicle manufacturer. The firm was planning to enter India; my job was to devise a strategy for it. A simple case to begin with I thought, but I knew very well that the challenges are higher in a simple case.
I started off with a simple framework (nothing great, decided the marketing mix and the way to enter – organic was the better route). I also identified the capabilities of the manufacturer that could be transferred to this setting. This went on for about 10 minutes. Here it was important to structure the problem well, following a MECE structure. I also shared some experience of a project with him that we had done in Competitive strategy project that we had done on cars and shared some uniqueness of thenIndian market with him. I am not covering this in detail as it was pretty standard and I just had to do the basics right. Then he told me to size the truck market in India. I told him that I will follow the stock method of analysis, by which I will estimate the number of trucks currently in operation throughout India. Since I was doing a demand side analysis, I divided the trucks into
variable loads (where capacity utilization is less than equal to 100%) or fixed loads (construction equipment carriers, petrol loads, car containers, etc.). He said that they normally don’t do it this way but he wanted me to proceed as he found it interesting.

Then, he told me that he wanted me to do it for the car carriers for paucity of time. I went ahead and assumed a certain number of carriers that are bought every year (the number wasn’t important, I assumed 1000 for ease of analysis). I understood the supply chain from him and he explained the dealer system to me. Then, I told him that I will assume steady state, as in the number of cars sold are the number of cars manufactured and distributed. I then divided it as per the number of manufacturers, number and location of manufacturing locations, distance, speed distribution, capacity of trucks, capacity utilization, number of hours driven in a day, maintenance days and the average number of days that a truck is driven in a year to arrive at the number of trips made and hence, the number of trucks that were plying. It was important to note that the trucks generally came back completely empty. I also told him that the transporters will like to keep some number of trucks on a standby. He asked me to estimate that as well. I gave him a framework to analyze that. I gave him a framework depending on locations, routes, failure time and MTBFs. He was ok with that. The case was extremely quantitative and was very intensive numerically. I also did a sensitivity analysis on one of the
parameters showing him that the whole estimate was sensitive to a few parameters.
Then, I told him that if I link both the cases together, then it gives me an interesting sight into what value proposition the truck
manufacturer can give to the Indian transporters. I told him that let’s look at each of the variables that I had estimated earlier and
see whether we can reduce them. Then, I said that we can try to increase the mileage and increase the size of the truck as well. Then, I told him that both the things might be inversely related. It can also be done that the truck speed can be increased on the back journey. Maintenance days can be decreased. He asked me for a few creative recommendations, which I gave – I don’t really remember them now but the method was as stated above.

Then, he asked me for a feedback about the case and discussion overall. I told him about how different the case would have been
had the case between about variable loads. He was ok with it.

He then told me to ask him a question. I asked him about the project specifically and to what detail McKinsey went. I also asked him how McKinsey keeps a tab on how clients implement suggestions. The overall case lasted about 25 minutes. I then linked it with one of the questions asked in the personal interview. I told him that it is a challenge that line managers like us will face in a
consulting environment, wherein we do not necessarily get to implement. Then, I shared a few jokes that I had played with consultants (mostly technical) and how it might be my turn to be on the receiving end now.
Tips: I think the skill that was being tested here was how comfortable I was with the interviewer in the beginning. It was important to engage him in a fruitful conversation that is argumentative but not confrontational. I think basic presence and communication skills were being tested here. Overall, the whole experience lasted about 10 minutes, and when he was convinced that I was comfortable enough, we went into the case.
It is important to be your natural self in the interview. Comfort with numbers is absolutely crucial. It is also important that when using creativity, structure should not be lost. Never shoot ideas of the hat, always be structured. It is important to see and address the body language of the interviewer. The basic thing that works is that one should focus on bringing out one’s strengths in the interview. My strengths lay in creativity, structuring and quick calculations (which I specifically tried to bring out in the interview). Your strengths (preparation will yield that) could be very different and you should try to bring them out. It is very important to remain cool after the interview since one might get a feeling that he’s not done well but the results could be just the other way round!

Round: Case Study Interview
Experience: We started the interview with a conversation about my career at IIT and my times in Cuttack (Orissa), my hometown. He was hooked onto my JEE rank and asked me why the number was unique. I don’t think he wanted a particularly great answer but he wanted to check my ability to think on my feet. He asked to give him 5 different uniquenesses.

He also asked me why Cuttack wasn’t doing as well as a Bhubaneswar. To this I replied taking geographic, political, cultural and economic reasons into account. We then discussed about my Summer Project with Reckitt Benckiser (this was an automation project with a FMCG major). He asked me to explain the labor implications of implementing automation. He then went ahead to ask me my experiences in dealing with unionized labor at ITC. He was also interested in one of the papers that I had written about
BOP and presented at XLRI. This was about how to bring your best people to the BOP. He asked me to explain the paper and then told me to explain how useful it can be to the corporate world. My observation had told me that he was very practical and won’t like flowery answers that this is the idea of the millennium! I gave him all the strengths and weaknesses of the idea (and real ground level ones) in implementation.

After that he asked me why I was looking forward to a consulting career. I told him that it links well to my long term goal, which is
leading a NGO. I told him that this is one of the reasons that McKinsey stands out for me as a firm, with all the public policy and
pro-bono work. We discussed a bit about India’s policy change from the ‘50s to the ‘70s. I gave him some funda about what I had
seen in the Commanding Heights video, though he was doing most of the talking.

He was visibly happy with the fact that I said public policy (Later I realized that he specializes in public policy at McK) and told me
that he will give me a case on it. The whole experience lasted 15 minutes.

He started off the case asking me what I knew about the Bharat Nirman Project. I told him that my knowledge is limited to what I have read in the papers over the past few weeks and I do not know in detail about it. He told me that this case will enhance my
learning about the challenges facing somebody working in public policy.

The case was about rural electrification. He said the objective of the central government has now shifted to putting an electric bulb in every Indian home by Feb, 2008. He asked me how the Government should go about it.

I started off telling him that the idea looked unrealistic to me. Assuming that 1 billion is the Indian population and 65% lived in
villages, 650 million is the current rural population. Assuming that there are 5 members per rural household, there are 130 million
households. Then assuming that 30% of rural India is electrified, 91 million households remain. We just have two years, which is
approximately 700 days. Even if we work throughout, 1.3 lakh households have to be electrified every day. This is by no means
easy. Add to this fact that there is huge geographic dispersion and the current state of the SEBs, the plan looks nonviable. I told him that I found it impractical. To this he replied saying that most public policy projects are such. They lack thinking about the design phase itself. He asked me to go ahead with the problem assuming it is doable.

I approached the problem saying that I would see the project from three standpoints – economic, organizational and operational. On the operational point, I would divide the project into generation and T&D phases. On the economic standpoint, I would look at the ways and means to fund this project. On the organizational front, I would like to see who would own this project. Here, he told me that the question should not be treated like any other consulting case and he is looking for completely creative solutions.

I asked him whether I should go ahead with the analysis the way I had structured or he wanted me to do something different. He
replied that he is looking for specifically the Generation area. I told him that when it comes to generation, there are four issues
that need to be looked at – Performance of conventional energy generation units, New conventional energy units, isolated units and non-conventional sources of energy. He said that I should discuss the non-conventional energy sources first.

I told him that I was aware of solar, wind and bagas (sugarcane by product). He asked me to describe the economics of Solar. I showed it to him that at the current rate, it’s unprofitable. Then, we went to Wind energy. I told him that the issues to look for
here are technology, fixed costs and practical viability (availability of areas) where they can be installed. We discussed each one of them in greater detail from then on.

I told him that when it comes to buying technology, it would be very costly and technology transfer has to be on a mutual basis.
Then, we went it to the details of the windmill technology and its advantages in the Indian context. He was doing most of the talking here.

He asked me to do a commercial evaluation of all these technologies. I did the same considering three parameters – speed (because the industry has an external effect), cost and future viability (to incorporate learning curve effects). After shedding some light on each one of them, he asked me to move on to the funding aspect in generation.

I told him that the money here can be drawn from four areas – government, Indian private, Foreign players and debtors. I told him how each one of them was different (most of the logic was thought on the spot). We then discussed about the amount of privatization that should be allowed. I was of the opinion that wherever private participation is allowed, it should be in both R&D and generation. Having only one of them was not of any use. He didn’t agree to it and he was of the opinion that we weren’t ready yet. We closed the interview on an argumentative note.

He asked me to ask a question at the end. I asked him what kind of persuasive powers consultants enjoy when it comes to public policy projects. He smiled and gave me a lot of insight into public policy consulting. He appreciated the fact at the end of the interview that I could make people talk. The whole experience lasted close to 20 mins.
Tips: Keep yourself cool. Show a good understanding of the things happening around you (may not be knowledge, but an opinion usually helps). Do not try to throw facts when they amount to nothing!

Round: Case Study Interview
Experience: He asked me about the problems that dealing with a union entails. There were a few more specific questions about my resume, in which I had to describe the work I did. I spoke for some time – maybe 2 minutes.

Then he asked me the kind of preparation that our batch had done for consulting. I gave him some feedback about how the interview workshop process done by McKinsey could have been better and how different it was from other colleges (stressing on poor institutional memory and ways to deal with it). He asked me what my last case was about. When I told him that it was about public policy and I had like it. He said that he also wanted me to do a case in that. The whole conversation lasted close to a little over 10 minutes.

An extremely short case. It lasted less than 10 minutes. He asked me what a government could do to improve the banking policy of a third-world country. To begin with, I told him that there is no generic answer and the policy has to be case specific. I also told him that I got a feeling that he was speaking from personal experience.

He said that I was right and asked me to take the case of Bahrain. He asked me what I knew about Bahrain and its banking industry. I told him that I knew it was a Muslim country and was staunch in protecting Muslim values (I used to collect stamps; I knew that they did not have a word of English – I told him that).

Then he gave me a good overview about Bahrain (lot of tangential stuff) and told me that the Finance minister was worried that the industry might lose it. He told me it was majorly into fostering corporate banks.

To begin with I told him that it was a case of B2B marketing and banks would stay if they get a good value proposition in Bahrain.
But then, if they get a better value proposition elsewhere, they’ll shift. He said I was right and asked me to think ahead. I asked him who these banks were. He told me that they were the Middle East bases of MNC banks. I asked him why the banks were there in the first case. He told me that it was centrally located and had liberal laws. I analyzed the geography and told him that what struck me was the fact it was close to Dubai. I asked him why not Dubai?

He told me that there was an announcement by the Dubai officials that they would make their policies freer than Bahrain and would make it a free trading zone.

I inferred from this saying that this might be a symptom of the real issue but wasn’t the actual problem. To this, he agreed. I told him that first of all I need to analyze the Dubai threat more closely. I told him first that we need to establish whether Dubai’s threat is credible or not (look at their history and look at the economic impact). He asked me to assume that they can do it. Then, I told him to look at the value proposition (including the switching cost to Dubai – local knowledge, skill base) that Bahrain provides and compare to the value proposition that Dubai gives. I told him that it is important to keep a futuristic view in mind. Then, I told him that what strikes me about the case is the fact that in this industry, it is very important to build your local clientele and not rely on foreigners. He said fine.

Then, I quizzed him about how developed was Bahrain’s retail and corporate banking was. I told him that it would relate very closely to the economic development was in Bahrain.

I told him that I felt that the real issue with Bahrain was the fact that the industry relied too much on MNCs without first satisfying local demand. I told him that I would like to create a policy keeping this in mind.

He asked me to stop the interview then and there.
Tips: Thinking on your feet is extremely important at the beginning of the case. First think common sensical and then get on to the regular consulting case analysis. One way of dealing with a person you know is to use your previous experience with him (in any which way).

Round: Other Interview
Experience: I was told at the beginning that I won’t have a case. He asked me to ask a few questions that I felt were relevant.

I asked him how McKinsey makes the environment conducive for knowledge sharing. He gave me a few inputs.

I told him what I had read about McKinsey’s knowledge management in a HBS case. He heard it attentively. He then gave me an idea about the state of affairs now and particularly in India. I asked him about how sharing gets linked to performance initiatives. I also asked him how other firms (esp. consulting) do it. He then asked me to narrate a few instances about ISB. I told him that any education program is incomplete without pranks. I told him a few pranks that I had played on a few friends in ISB (and vice versa).
Tips: Be your natural self and try to gauge the interviewer’s body language when telling a story.

Skills:
College Name: Indian School Of Business (ISB)